#######Assign values for
#######  PARAMETERS
alpha1=0.6
alpha2=0.4
lambda0 = 0.635
lambda1 = 5
lambda2 = 0.01
theta=0.2
#######  EXOGENOUS
g=20
r_bar = 0.025
#######  Starting values for stocks
b_cb = 21.576
b_h = 64.865
h_h = 21.62
#######Create a model object, and name it pc_mod
#######Add equations to model PC
#######Determination of output - eq. 4.1
 y = cons + g
#######Disposable income - eq. 4.2
 yd = y - t + r(-1)*b_h(-1)
#######Tax payments - eq. 4.3
 t = theta*(y + r(-1)*b_h(-1))
#######Wealth accumulation - eq. 4.4
 v = v(-1) + (yd - cons)
#######Consumption function - eq. 4.5
 cons = alpha1*yd + alpha2*v(-1)
#######Cash money - eq. 4.6
 h_h = v - b_h  
#######Demand for government bills - eq. 4.7
 b_h = v*(lambda0 + lambda1*r - lambda2*(yd/v))
#######Supply of government bills - eq. 4.8
 b_s = b_s(-1) + (g + r(-1)*b_s(-1)) - (t + r(-1)*b_cb(-1))
#######Government bills held by the central bank - eq. 4.10
 b_cb = b_s - b_h
#######Interest rate as policy instrument - eq. 4.11
 r = r_bar
#######supply of cash
h_s = h_s(-1) + b_cb - b_cb(-1)
########few variables for shocks
SOB=b_h/v
SOM=h_h/v
#######End of model
timeline 1945 2010